Hi to everybody.
I have been trying to replicate the paper 'Monetary and Macroprudential Policies under Fixed and Variable Interest Rates' by Margarita Rubio. I wonder how to use dynare to deal with the following form of equation. See attached. The variables are log-linearized, and the equation can be found in the Appendix of the paper. I'd be very glad to receive any feedback. Thank you very much in advance.
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Dynare problem
by Mike » Sat Oct 15, 2016 3:30 am
- Attachments
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equation.pdf- equation
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- Monetary and Macroprudential Policies.pdf
- paper
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- Mike
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Re: Dynare problem
by jpfeifer » Sat Oct 15, 2016 11:12 am
You need to express the equation in recursive form. I tried it quickly in the attached document. Please check carefully whether I did a mistake somewhere. Somewhere in between you need to make use of the law of iterated expectations.
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- recursive_rubio_2010.pdf
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Re: Dynare problem
by Mike » Sat Oct 15, 2016 2:08 pm
That is right. Thank you for your reply, it's very helpful.
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